Residence in no income tax state??

[ShokWaveRider]

Our choice in moving to (and Staying) was the following in the order presented.

1) Availability of Healthcare
2) Quality of Healthcare
3) Quantity of HC Specialists in a given area
4) Cost of Healthcare (Really ACA Not Location)
5) Weather
6) Cost of high quality housing close to the beach
7) The Beach
8) Must not be a LCOL area (Services are typically poor there)

Taxes, insurance etc. really were not criteria. We personally do not like LCOL areas, the ones in Florida look pretty run down. We prefer MCOL (Upper Middle Class) where people have more of a pride of home ownership, services are plentiful and there is a lot to do. But again all aspects of Healthcare came way above others.

 

[Buckeye]

I keep thinking that i would buy a condo.

Be sure your condo is outfitted with hurricane shutters because you probably won't be heading to Florida to do hurricane prep. You'll just get to watch things unfolding from afar.

Also, be sure to factor additional assessments to do building repair after the hurricane blows the roof off or damages common area property. All the common area damage will be paid by the residents. At least, what is not covered by insurance. The wind portion of most homeowners/property insurance policies have a percentage of property value deductible (2%-4%) versus a fixed deductible.

Also, I would hate writing that monthly condo charges check ($400-$500) for the 6 months I wasn't there to enjoy the amenities.

 

[RockLife]

My brother bought a home in FL and is keeping a lake house in SC for the summer. He's a tax CPA so I'm sure he knows how to qualify as a FL resident.

I'd have two concerns. One is that FL typically got a lot of tax revenue from tourism. Not sure how well that's going to work now. Will they increase sales, gasoline or property taxes? Let the infrastructure fall apart and cut back on servuces? The other is windstorm insurance. I'd guess it's going to be very expensive anywhere in FL, even if you're not on the coast, and the cost is going to rise faster than general inflation.

I'm buying a house right now in FL. Wind insurance is going to be about $250/mo and flood insurance (which I declined because we are in a good zone) would be around $500/mo. This is a $300K home. Just FYI and for future reference.

 

[ShokWaveRider]

Flood insurance in FLA is ~$500 a YEAR, not per month.

 

[Buckeye]

I'm buying a house right now in FL. Wind insurance is going to be about $250/mo and flood insurance (which I declined because we are in a good zone) would be around $500/mo. This is a $300K home. Just FYI and for future reference.

Wow, what part of the state are you in? We are in the Orlando area and our annual homeowners (which includes wind) is about $1500 with a fixed deductible (many are a 2%-4% percentage deductible for wind) with a rebuild cost of about $385,000. You must be near the coastline.

 

[ShokWaveRider]

Interesting insurance cost claims here. We are 1 (Yes One) mile from the beach in a 3200sqft home on a barrier island in an "X" Flood zone, built in 2002 of concrete with a tile roof. Values are around $800k.

Home insurance is $1300 a year with a $1k deductible and Flood insurance is $480.

 

[Chuckanut]

Be careful regarding what No Income Tax state you move to. Slowly but surely, they are becoming very rare. Some are discussing a capital gains tax in my home state of Washington as a way of getting a foot in the income tax door. We'll see where that goes.

 

[RockLife]

Flood insurance in FLA is ~$500 a YEAR, not per month.

You're right, of course. My mistake - thanks for correcting.

 

[RockLife]

Wow, what part of the state are you in? We are in the Orlando area and our annual homeowners (which includes wind) is about $1500 with a fixed deductible (many are a 2%-4% percentage deductible for wind) with a rebuild cost of about $385,000. You must be near the coastline.

I am near the coast, 2 blocks from the beach, but as was corrected above, that flood number was per year, not per month. Sorry for the confusion!

 

[RetMD21]

Here is the Michigan form to change domicile. I can't see anything about a part time resident domiciled out of state being taxed but it is entirely possible that I missed it. https://www.michigan.gov/documents/taxes/3799_373276_7.pdf

 

[CRLLS]

As a long time resident in Illinois, I think the combined tax rates are not horrible. I am speaking as a retiree with 98% incomes being covered by IRA and SS benefits. That makes my state income tax zero. This is not right IMO. I should pay something. My sales tax is no 10% but 7.75%. Food and drugs are at a much, much lower level. and real estate tax is around 2.2% of actual fair market sales value (not adjusted value or with homestead exemption applied, etc. ) Note: I didn't say assessed value which can be manipulated in so many ways from location to location and state to state it makes meaningful comparison difficult.

Is it the least expensive taxed as a whole? No. Does the state need something to provide services? Yes. The bottom line is it probably not as bad today as people make it out to be. Virtually all of DW's family lives here as does our DS1 and his family. We need to be close. No ands, ifs, or buts about it. Wisconsin is our only other close option. If Illinois decides to change the income tax to include retirement incomes, we might have to look at it.

As a whole, part time residents regardless of being "full time residents" in an other state, do have to pay Illinois income tax on income earned here. Such as doing business here, employed here, have rental income from an Illinois rental, etc. There is an exception for a few bordering states that have an agreement with Illinois.

 

[troutnut1]

Excerpt from a letter to my sister recently when they had the same idea...

“We have also looked for a tax friendly state where we might have a primary residence and leave this for our second home. I have been looking at that for a couple of years now and it’s a lot more complicated than I initially thought. I worked alongside an income tax auditor for the State of Montana who regularly did residency audits and some of the things she told me kind of scared me. She talked about even looking at peoples cell phone records to tell where they were most of the time, and at their refrigerator contents, gym memberships, etc. I also ran into an entire field of law I didn’t even know existed. “Residency Tax Planning”. I got a lot of valuable information from a Palm Springs Law firm you might take a look at:

https://www.palmspringstaxandtrustl...presumption-california-residency-not-cracked/

https://www.palmspringstaxandtrustl...nd-tasks-to-reduce-the-risk-for-nonresidents/

They have a lot of articles about this. Worth a look. I didn’t even know I probably need someone like them to validate my plan. I don’t even know whether there is anyone like them in Montana. I’m still looking.

I also found it was difficult to determine how much actual savings we would get by moving even after being in the tax business here for the last 20 years. States have so many ways of taxing us that aren’t obvious. Sales tax, property tax, vehicle tax, estate tax, exemptions on certain retirement income or not, use tax, utility costs, and cost of living differences. I’ve found it nearly impossible to determine how much I would actually be saving after all that, commuting costs, and costs of maintaining two separate homes. So we are still here and likely will be for a while. I’m probably going to pay Montana a good chunk of money as we do Roth IRA conversions over the next 6 years, but its still cheaper for us at this point than moving and trying to juggle two homes, or running afoul of one or more tax auditors.”